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TheStreet Open House

Viasystems Announces Second Quarter 2012 Results

Stocks in this article: VIAS

Adjusted EPS has certain material limitations, primarily due to the exclusion of certain amounts from earnings that are material to the company’s consolidated results of operations, such as costs associated with acquisitions and equity registrations, restructuring and impairment charges, certain interest and other expenses, and certain adjustments to net income to arrive at net income available to common stockholders. As a result, Adjusted EPS differs materially from the earnings per share calculations reported by other companies in the industry, limiting its usefulness as a comparative measure.

Investor Conference Call

Viasystems will broadcast live via internet an investor conference call at 11:00 a.m. Eastern Time today, August 8, 2012. The live listen-only audio of the conference call will be available at http://investor.viasystems.com. The live conference call will be available by telephone for professional investors and analysts by dialing 877-640-9867 (toll-free) or 914-495-8546.

A telephonic replay of the conference call will be available for one week at 855-859-2056 or 404-537-3406. Replay listeners should enter the conference ID 14038874. The webcast replay will be available at http://investor.viasystems.com for an indefinite period.

Forward Looking Statements

Certain statements in this communication constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are made on the basis of the current beliefs, expectations and assumptions of the management of Viasystems regarding future events and are subject to significant risks and uncertainty. Statements regarding our expected performance in the future are forward-looking statements. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Viasystems undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by law. Actual results may differ materially from those expressed or implied. Such differences may result from a variety of factors, including but not limited to: legal or regulatory proceedings; the ability of Viasystems to successfully integrate DDi’s operations, product lines and technology and to realize additional opportunities for growth; any actions taken by the company, including but not limited to, restructuring or strategic initiatives (including capital investments or asset acquisitions or dispositions); or developments beyond the company’s control, including but not limited to, changes in domestic or global economic conditions, competitive conditions and consumer preferences, adverse weather conditions or natural disasters, health concerns, international, political or military developments and technological developments. Additional factors that may cause results to differ materially from those described in the forward-looking statements are set forth under the heading “Item 1A. Risk Factors,” in the Annual Report on Form 10-K filed by Viasystems with the SEC on February 15, 2012, Item 1A. Risk Factors,” in the Quarterly Report on Form 10-Q filed by Viasystems with the SEC on May 9, 2012 and in Viasystems’ other filings made from time to time with the SEC and available at the SEC’s website, www.sec.gov.

About Viasystems

Viasystems Group, Inc. is a technology leader and a worldwide provider of complex multi-layer printed circuit boards (PCBs) and electro-mechanical solutions (E-M Solutions). Its PCBs serve as the “electronic backbone” of almost all electronic equipment, and its E-M Solutions products and services include integration of PCBs and other components into finished or semi-finished electronic equipment, for which it also provides custom and standard metal enclosures, cabinets, racks and sub-racks, backplanes and busbars. Viasystems’ approximately 15,600 employees around the world serve over 1,000 customers in the automotive, telecommunications, industrial & instrumentation, computer and datacommunications, and military and aerospace end markets. For additional information about Viasystems, please visit the company’s website at www.viasystems.com.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

( dollars in thousands, except per share amounts)

(Unaudited)

 
Three Months Ended
June 30, 2012   March 31, 2012   June 30, 2011
 
Net sales $ 296,861 $ 262,089 $ 270,744
Operating expenses:
Cost of goods sold, exclusive of items shown separately 235,556 211,057 219,574
Selling, general and administrative 31,228 21,492 19,268
Depreciation 18,579 17,006 16,332
Amortization 802 388 430
Restructuring and impairment   1,958     6,987    
Operating income 8,738 5,159 15,140
Other expense (income):
Interest expense, net 12,144 7,352 7,225
Amortization of deferred financing costs 766 504 504
Loss on early extinguishment of debt 24,234
Other, net   (710 )   224     532
(Loss) income before income taxes (27,696 ) (2,921 ) 6,879
Income taxes   5,342     2,216     3,311
Net (loss) income $ (33,038 ) $ (5,137 ) $ 3,568
 
Less:
Net income (loss) attributable to noncontrolling interest   271     (495 )   385
Net (loss) income attributable to common stockholders $ (33,309 ) $ (4,642 ) $ 3,183
 
Basic (loss) earnings per share $ (1.67 ) $ (0.23 ) $ 0.16
Diluted (loss) earnings per share $ (1.67 ) $ (0.23 ) $ 0.16
Basic weighted average shares outstanding   19,990,628     19,984,414     19,980,153
Diluted weighted average shares outstanding   19,990,628     19,984,414     20,135,530
 

This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

( dollars in thousands)

     
June 30, 2012

December 31, 2011

ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 85,092 $ 71,281
Restricted cash 6,830
Accounts receivable, net 222,604 196,065
Inventories 135,939 116,457
Prepaid expenses and other   40,946   34,280
Total current assets 491,411 418,083
Property, plant and equipment, net 418,802 307,290
Goodwill and other noncurrent assets   278,177   113,876
Total assets $ 1,188,390 $ 839,249
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt $ 12,213 $ 10,054
Accounts payable 211,403 195,908
Accrued and other liabilities   103,107   75,388
Total current liabilities 326,723 281,350
Long-term debt, less current maturities 564,051 216,716
Other non-current liabilities   50,228   48,111
Total liabilities   941,002   546,177
 
Total stockholders’ equity   247,388   293,072
Total liabilities and stockholders’ equity $ 1,188,390 $ 839,249
 

This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

( dollars in thousands)

(unaudited)

     

Six Months Ended

Six Months Ended

June 30, 2012 June 30, 2011
 
Net cash provided by operating activities $ 32,152   $ 17,675  
 
Cash flows from investing activities:
Acquisition of DDi, net of cash acquired (253,464 )
Capital expenditures (52,490 ) (49,808 )
Acquisition of remaining interest in joint venture (10,106 )
Proceeds from disposals of property   102     104  
Net cash used in investing activities   (315,958 )   (49,704 )
 
Cash flows from financing activities:
Proceeds from 7.875% Senior Secured Notes 550,000
Repayment of 12.0% Senior Secured Notes (236,295 )
Financing and other fees (16,006 )
Repayments of mortgages and credit facilities, net of borrowings

(82

)

Repayments of capital lease obligations (154 )
Distributions to noncontrolling interest       (229 )
Net cash provided by (used in) financing activities   297,617     (383 )
 
Net change in cash and cash equivalents 13,811 (32,412 )
 
Beginning cash   71,281     103,599  
Ending cash $ 85,092   $ 71,187  
 

This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

AS ADJUSTED FOR EFFECTS OF ACQUISITION AND REFINANCING

( dollars in thousands)

(Unaudited)

 
Three Months Ended June 30, 2012
As Reported   Special Items Non-GAAP Adjusted
 
Net sales $ 296,861

$

 

$ 296,861
Operating expenses:
Cost of goods sold, exclusive of items shown separately

235,556

(3,947

)

(a)

231,609

Selling, general and administrative 31,228 (7,978 ) (b) 23,250
Depreciation 18,579 18,579
Amortization 802 802
Restructuring and impairment   1,958   (199 ) (c)   1,759  
Operating income 8,738 20,862
Other expense (income):
Interest expense, net 12,144 (4,302 ) (d) 7,842
Amortization of deferred financing costs 766 (206 ) (e) 560
Loss on early extinguishment of debt 24,234 (24,234 ) (f)
Other, net   (710 )   (710 )
(Loss) income before income taxes (27,696 ) 13,170
Income taxes   5,342   (3,700 ) (g)   1,642  
Net (loss) income $ (33,038 ) $ 11,528  
(a)  

Represents the excess of i) the fair value of inventories purchased in connection with the acquisition of DDi, over ii) the manufactured cost of inventories purchased in connection with the acquisition of DDi.

(b)

Represents fees and expenses related to the acquisition of DDi.

(c) Represents costs of severance for employees made redundant following the acquisition of DDi.
(d)

Represents i) approximately $2,200 cash interest expense and approximately $133 non-cash interest expense on the 12.0% 2015 Notes incurred during the “call period” between the April 30, 2012 issuance date of the 7.875% 2019 Notes and the May 30, 2012 final termination date of the 12.0% 2015 Notes, plus ii) approximately $1,969 cash interest expense on the 7.875% 2019 Notes between the April 30, 2012 issuance of the 2019 Notes and the May 31, 2012 acquisition date of DDi.

(e)

Represents i) approximately $116 amortization expense on the 12.0% 2015 Notes incurred during the “call period” between the April 30, 2012 issuance date of the 7.875% 2019 Notes and the May 30, 2012 final termination date of the 12.0% 2015 Notes, plus ii) approximately $90 amortization expense on the 7.875% 2019 Notes between the April 30, 2012 issuance of the 2019 Notes and the May 31, 2012 acquisition date of DDi.

(f)

Represents cash and non-cash costs incurred in connection with the early termination of the 12.0% 2015 Notes on May 30, 2012.

(g)

Represents income tax expense charged in the quarter ended June 30, 2012 in connection with uncertain realizability of deferred tax assets.

This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

NET SALES AND BALANCE SHEET STATISTICS

(dollars in millions)

(Unaudited)

 
Three Months Ended
June 30, 2012 (a)     March 31, 2012 (a)     June 30, 2011(a)
Net sales by segment    
Printed Circuit Boards (a) $ 240.4 81 % $ 213.1 81 % $ 215.1 79 %
Assembly   56.5 19 %   49.0 19 %   55.6 21 %
$ 296.9 100 % $ 262.1 100 % $ 270.7 100 %
 

 

(a) Excludes $44.1, $68.9 and $66.2 net sales by DDi Corp. during the three months ended June 30, 2012, March 31, 2012, June 30, 2011, respectively.

  Percentage of Pro Forma (b) Net Sales     PF (b) Net Sales Increase
Three Months Ended Sequential:     Year/Year:
Jun. 30,     Mar. 31,     Jun. 30, 2Q12 vs 2Q12 vs
2012   2012   2011   1Q12 2Q11

Pro forma (b) net sales by end market

Automotive 30 % 32 % 30 % (2 %) 2 %
Industrial & Instrumentation 29 % 26 % 29 % 14 % 3 %
Computer and Datacommunications 17 % 18 % 15 % (7 %) 13 %
Telecommunications 15 % 14 % 17 % 11 % (13 %)
Military and Aerospace 9 % 10 % 9 % (2 %) (1 %)
100 % 100 % 100 % 3 % 1 %
 

 

(b) Includes the effects of $44.1, $68.9 and $66.2 net sales by DDi Corp. during the three months ended June 30, 2012, March 31, 2012, June 30, 2011, respectively.

  2Q12 (c)     1Q12     4Q11     3Q11     2Q11
Working capital metrics
Days’ sales outstanding 58.8 63.4 65.6 63.9 64.0
Inventory turns 8.0 7.5 7.1 7.9 8.6
Days’ payables outstanding 70.0 79.7 85.8 80.0 77.4
Cash cycle (days) 33.8 32.0 30.8 29.4 28.4
 

 

(c) Adjusted for the effects of working capital acquired from DDi Corp.

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

RECONCILIATION OF OPERATING INCOME

TO ADJUSTED EBITDA

( dollars in millions)

(Unaudited)

 
Three Months Ended
June 30, 2012     March 31, 2012     June 30, 2011
 
Operating income $ 8.7 $ 5.2 $ 15.1
Add-back:
Depreciation and amortization 19.4 17.4 16.8
Costs relating to acquisitions and equity registrations 11.9 1.0 0.1
Non-cash stock compensation expense 2.7 2.5 2.3
Restructuring and impairment   2.0   7.0  
Adjusted EBITDA $ 44.7 $ 33.1 $ 34.3

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

RECONCILIATION OF DILUTED EARNINGS PER SHARE

TO ADJUSTED EARNINGS PER SHARE

( dollars in thousands, except per share amounts)

(Unaudited)

 
Three Months Ended

June 30, 2012

  March 31, 2012     June 30, 2011
 

Net (loss) income attributable to common stockholders (GAAP)

$

(33,309

)

$

(4,642

)

$

3,183

 
Adjustments:
Non-cash stock compensation expense 2,669 2,521 2,339
Amortization 1,568 892 934
Loss on early extinguishment of debt 24,234
Costs related to acquisitions and equity registrations 11,925 (a) 1,012 99
Transition period interest 4,169 (b)
Restructuring and impairment 1,958 6,987
Special income tax items 1,716 (683 ) (745 )
Non-cash interest 266 399 399
Income tax effects of adjustments   (44 )       2  
 
Adjusted net income attributable to common stockholders

$

15,152

 

$

6,486

 

$

6,211

 
 
Diluted weighted average shares outstanding   20,252,446     20,172,532     20,135,530  
 
Diluted (loss) earnings per share (GAAP) $ (1.67 ) $ (0.23 ) $ 0.16  
Adjusted EPS $ 0.75   $ 0.32   $ 0.31  

(a)

 

Includes i) approximately $7,978 fees and expenses related to the acquisition of DDi, plus ii) $3,947 representing the fair value write-up of inventories purchased in connection with the DDi acquisition.

 

(b)

Represents i) approximately $2,200 cash interest expense on the 12.0% 2015 Notes incurred during the “call period” between the April 30, 2012 issuance date of the 7.875% 2019 Notes and the May 30, 2012 final termination date of the 12.0% 2015 Notes, plus ii) approximately $1,969 cash interest expense on the 7.875% 2019 Notes between the April 30, 2012 issuance of the 2019 Notes and the May 31, 2012 acquisition date of DDi.





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